Economic resources utilisation in maize production: Evidence from Central Region, Ghana

Abstract

This study was undertaken to improve the efficiency of maize farming in the Central Region of Ghana. A stochastic frontier cost function, applied to cross-sectional data, was used to analyse firm level cost efficiency of production and its determinants. Efficiency of resource utilization was analysed using marginal value product of inputs. Results from the Cobb-Douglas stochastic cost frontier model and a farm-specific efficiency model showed that the mean cost efficiency was 94.95%. Furthermore, all production inputs were inefficiently allocated. Access to extension services, experience and access to credit had positive relationships with cost efficiency. The study concludes that maize farmers are not fully efficient in resource combination and allocation. Improved technologies and innovations should be made accessible to farmers by public and private extension service providers to increase efficiency of their maize farms. Key words: Cost efficiency, allocative efficiency, cost frontier, marginal value product, maximum likelihood estimates.